SCI: Advantages or disadvantages?
SCI: Advantages or disadvantages
Consider investing in real estate and at the same time wish for a solution to start easily transmitting your property (s ) to your children, buy with your family while simplifying the administrative management of your rental assets. Therefore, a question arises: is it better to hold your property directly or via a real estate company? This structure makes it possible to house all or part of its real estate assets in order to avoid indivision.
Creating an SCI (Société Civile Immobilière) to simplify the management of your real estate assets is a very common practice, two people are enough for its constitution, no maximum conditions it, nor nationality, unlike other types of companies. The drafting remains relatively free but clauses remain important to stipulate. Such as the scope of the manager's mandate, the rules of majorities during votes at general meetings, the specific regulations in the event of sale or exchange of shares, the limitation of the right to vote to parents only or the provision of approvals in the event of entry into or exit from the company.
The main purpose is to facilitate the acquisition, management and transmission of real estate, in the family context as in the professional context in order to carry out a real estate construction operation. In which cases is it really wise to use an SCI? What are the different advantages and disadvantages ?
The benefits of creating an SCI
The partners can manage the organization of relations in terms of statutes as they see fit, the freedom of organization and hierarchy is total. The scope of the SCI manager's powers may be similar to all or in the hands of one person, dealing with day-to-day business. Important decisions are generally taken in assembly according to the majority fixed by the statutes.
Holding shares in the SCI in the event of succession greatly simplifies the transfer of assets, shares are simpler and less expensive than the direct transfer of real estate. They make it possible to avoid the finding by authentic deed before the notary.
The costs related to the ownership of real estate and expenses are shared between the partners, making the management of patrimonial assets more flexible. Especially since it becomes possible to reduce the taxable result of the SCI by deducting rental expenses related to the possession of the building such as repair costs or maintenance costs.
In addition to deducting rental expenses, it is possible to benefit from advantageous taxes, by having the freedom to choose the tax regime of the profits of the SCI. The choice is between corporation tax or income tax, to be adjusted according to the most advantageous according to the different situations.
The last advantage of the SCI is significant since it makes it possible to increase the purchasing capacity by bringing together the capital of several people, a key factor for the construction of a substantial and sustainable real estate portfolio. Investment opportunities are increased and facilitated in the context of obtaining external financing, in particular to obtain advantageous bank loans.
The disadvantages of creating an SCI
To create an SCI at least 2 partners will be required, whether they are individuals or companies.
As with any company, the procedures for setting up an SCI can be complex and relatively cumbersome.
The management of purchased goods is the only use of an SCI, it restricts the field of activity. It is impossible to use this form of company to carry out the purchase and resale of immovable property, an activity relating to real estate dealers.
Unlike other forms of partnership, in an SCI the partners will be liable for the debts of the latter on their personal assets. The partners will be proportionately liable, up to the percentage of share capital held, in the event of impossibility of repayment of bank loan on the part of the SCI.
The SCI is a viable and sustainable solution to make real estate investments in a family or professional way. This allows you to buy a property with several while distributing the shares of each to the extent of the contribution invested in the property .
It is a sustainable and easier way to be able to share wealth with your family. In a professional way this makes it possible to give a share to each of the partners without imposing amounts because ultimately each contributes to the extent of his means.
You want to
to sell in Paris or its surroundings ?
Posted on 21/10/2021 by
Andy LECUYER
